The AI chip of rebellions.
Courtesy Rebellion
TNvidia’s incredible share price surge last year has fueled an arms race among semiconductor startups from Silicon Valley to Seoul to raise more funding and gain a foothold in the fast-growing AI chip market. In South Korea’s semiconductor hub, a four-year-old AI chip startup led by a former Wall Street quant recently got a big boost in the funding race.
Last week, Seongnam-based Rebellions announced that it had raised $124 million in Series B funding, bringing its total funding to $210 million, the most of any other AI in South Korea. Chip is more than a startup. “It’s almost twice as much as other competitors,” Rebellions cofounder and CEO Sangyeon Park enthused in a video interview.
Its rivals include Sapeon, which last raised $45 million in July from investors including Seoul-based private equity firm Ascent Equity Partners (backed by “Baby Shark” creator Pink Fong), South Korea’s Group GS Group and WE Ventures, whose portfolio includes South Korean Rich lister Song Chi-hyung’s crypto exchange operator Dynamo. Another contender is FuriosaAI, which raised a $70 million Series B in 2021 from investors including D2 startup Factory, which is backed by South Korean billionaire Lee Hye-jin’s Internet giant Naver. DSC Investments, an early backer of Seoul and Seattle-based chip design startup Mango Boost; and Seoul-based Aion Asset Management.
Rebellion’s Series B round was valued at $650 million. “But the funding market is very bad right now — interest rates are going up,” says Park, who was a quant developer at Morgan Stanley in New York before starting the coup in 2020. Definitely a unicorn company.
Rebels co-founder and CEO Sangyeon Park.
Courtesy Rebellion
The round was led by South Korean telecom operator KT and joined by KT’s data center unit, KT Cloud, and Shinhan Venture Investment, an arm of banking giant Shinhan Financial Group. Other investors in the round include Temasek’s pavilion capital, Corellia Capital, founded by former French digital economy minister Fleur Pellerin and led by an ethnic Korean. a joint venture between Japan’s DG Daiwa Ventures, brokerage Daiwa Securities Group and early-stage investor Digital Garage; and Noh & Partners, a South Korean private equity firm whose portfolio companies include Forbes Asia 100 to Watch 2022 honoree Seoul Robotics.
Among Rebel’s first investors is Kakao Ventures, the venture capital arm of billionaire Kim Beom-su’s Internet company Kakao. State-owned Korea Development Bank; SV Investment, a South Korean VC firm that has backed Kakao and South Korean billionaire Lee Sang-ryul’s EV battery component maker Chinbo. and IMM Investments, whose portfolio companies include billionaire Bum Kim’s Kupang and Chang Byung-gyu’s Crofton.
Investors like Rebellion because of its team, which combines research and development expertise from the U.S. and manufacturing know-how from South Korea, says Park, who holds a Ph.D. in electrical engineering and computer science from MIT and previously worked at the Texas office of SpaceX, Intel and Samsung. “We’re the only AI chip company that has this mix of talent,” he says. “That’s why we got so much attention.” For example, Rebellion co-founder and CTO Jin Wook Oh worked at IBM in New York for six years and earned a Ph.D. in Electrical Engineering from the Korea Advanced Institute of Science and Technology, a leading science and technology university in South Korea.
Park and his team will use the funds raised from the latest round to develop next-generation AI chips for large language models and hyperscalers, which provide large cloud computing services such as AWS, Microsoft Azure and Google Cloud. There are One advantage of the new chip, called Rebel, is that it’s much cheaper than Nvidia’s chips, which can cost more than $30,000, Park says. “We’re targeting half the price of Nvidia,” he says. “Nvidia’s margins are huge.” The $1.6 trillion market-cap company reported a gross margin of 74% for the quarter ended Oct. 29.
“When there’s a Goliath, there’s going to be a David. I believe one of the David candidates from South Korea is a rebel.
The South Korean startup says it is able to cut costs by using domestic suppliers and manufacturers. “By using the Korean semiconductor ecosystem, we can significantly reduce manufacturing costs,” says Park. “It doesn’t have to be a global supply chain involving Taiwan and the US that takes a lot of time and money.” Santa Clara, Calif.-based Nvidia, for example, primarily uses TSMC in Taiwan, the world’s leading maker of cutting-edge chips.
More specifically, Rebellions is using the Samsung ecosystem. Samsung, led by billionaire JY Lee, is the world’s largest memory chipmaker and the only contract chipmaker besides TSMC capable of making today’s most advanced chips. Rebellion is co-developing Rebel with Samsung and will use the tech giant’s high-bandwidth memory chips and its 4-nanometer chip manufacturing process. “We are strongly connected with Samsung, so we can significantly reduce manufacturing costs,” says Park. Rebellion and Samsung aim to complete development of the Rebel by the end of this year and begin mass production in 2025.
By partnering with South Korea’s biggest company — and with the backing of some of the country’s top investors — Park says Uprising could compete with billionaire Jensen Hwang’s Nvidia. “Right now, Nvidia is king. But nobody likes it — it has about 90% market share — nobody likes it because it’s too expensive,” says Park. “When there’s a Goliath, there’s going to be a David. I believe one of the David candidates from South Korea is a rebel.
“We are rebels, it’s in the name of our team,” he added.